Can an attorney help loan modification?

Homeowners should be cautious

The bottom line for borrowers may be a matter of time versus money because Harris estimates that the average homeowner would have to spend several hours a week on the telephone to work out a loan modification. Those who don't have the time to take on that much work may prefer to hire professional help.

What's more, while attorneys and lenders may disagree over whether the involvement of an attorney is warranted, they do agree that borrowers should exercise caution before they hire anyone to represent their legal interests.

Miller says borrowers should ask for references and a reputable lawyer should be able to explain his or her experience in loan modifications, describe the results he or she has achieved for other clients and give potential clients the names and telephone numbers of previous clients who can attest to the good quality of the lawyer's services.

Kelly explains that borrowers will need to sign a form that authorizes the attorney or other representative they've hired to speak to the lender about their situation because the lender has a responsibility to protect the borrower's privacy from unauthorized inquiries.

Harris advises homeowners to walk away from any attorney or loan modification company that charges an upfront fee before the work has been performed. Such fees are banned in a number of states.

"If anybody is asking for $2,000 or $3,000 or $4,000 upfront to do your modification for you, their incentive to help you is gone when you give them the money, unless they are just a mensch," he says. "People shouldn't be paying those fees upfront."

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